VRM - Carvana and Vroom seen as long-term winners by Piper Sandler
Piper Sandler turns even more constructive on Overweight-rated Carvana ([[CVNA]] +4.0%) and Vroom ([[VRM]] +0.2%). The firm says a barrage of data points suggest strong Q3 fundamentals and better prospects for long-term share gains. Analyst Alexander Potter: "Less than 1% of used car transactions take place online, but make no mistake, penetration is rising rapidly. This was true prior to COVID-19, but now, with consumers shunning public transit and clamoring for 'touchless' used car deliveries, the growth curve is bending even more steeply upward. Demand is particularly strong for older (5-10 year-old) vehicles - and this is negatively impacting average transaction prices - but after normalizing for age, used car prices have never been stronger. Higher prices don't necessarily drive higher profit (because COGS moves higher too), but as highlighted below, we think tight supply should benefit the online models." The firm says a barrage of data points suggest strong
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Carvana and Vroom seen as long-term winners by Piper Sandler